In this video, Wills and Tax Specialist Lee Young looks at the different types of LPAs, whether you need one and what to include.
HM Revenue & Customs has published draft legislation changing the taxation of termination payments, intended to come into force April 2018. The main changes are:-
- make all PILONs (payments in lieu of notice) taxable, even if they are non-contractual;
- require payment of employer NICs on sums over £30,000 (not currently payable); and
- ensuring payments for injury to feelings are subject to tax (there is currently a conflict of judicial authorities on this point)
The precise wording of the draft legislation is open for consultation until 5 October.
Comment
"The government has also indicated that they are going to keep the £30,000 tax-free allowance for redundancy and genuine compensation payments," says Head of Employment Paul Burton. This was following consultation in which they received negative feedback on their proposals to reduce the allowance to apply only to employees with a certain amount of service and to have it start from a very low amount, only rising to a reasonable amount, still less than £30,000, after many years’ service.
Our Employment Team, based in Christchurch, also cover Bournemouth, Poole and the New Forest. For a free initial chat, please call 01202 499255 and Paul or a member of the team will be happy to discuss any questions that you may have.
